Radiation Room would like to thank Ambrosia Software
for their kind permission to repost the following article on our
website.Please take a moment to visit their website and check out their
offerings.

While the article below
from 2002 documents a software developer's experiences with piracy, it
sheds some light on what the music and entertainment businesses are up
against in stemming the tide of intellectual property theft and
copyright enforcement.

It's a rare day when a shareware programmer gets firm
statistics on the extent of software piracy, but just recently, I got
that chance.

You see, the company I work for writes and publishes
shareware -- software that encourages users to make lots of
copies and share them with friends. It works like this: we write a game
or utility and make it available for download and on low cost CD, so
that anyone can install it and try it out for a while -- kick the tires
and drive it around the block a few times, so to speak. If they like it,
they can buy the product; if not, they just delete it or pass the CD on
to someone else.

We make money, and stay in business, by selling
software that competes with commercial products for quality and
entertainment value, yet priced so that it doesn't stretch the
pizza-and-beer budget of the average college student. There's no
bait-and-switch going on, you get a fair chance to try out the product
and consider if your $25 could be better spent elsewhere. Consider that
amount will cover a burger run and movie ticket for about 3 hours
entertainment, but a good game can entertain you for days or weeks --
and we won't make you watch Jar Jar Binks.

Just a few years back, Ambrosia's software was
distributed on the honor system. You could download the software and use
it forever, scot free except for the friendly reminders that you had the
software for 1500 days and still hadn't beaten level 6. Now, obviously
this was a pretty big leap of faith on our part, but it also built up an
almost cult following among Mac users. What we lost in sales, we made up
in good will. It wasn't ideal, but it was certainly idealistic, and
helped put the founder Andrew Welch through college and kept all of the
employees supplied with pizza and beer. (I think there's a law of
conservation at work there.)

And as things go, this was all fine and good --
except that eventually Andrew graduated and everyone else got sick of
pizza and beer. Ambrosia grew from an interesting sideline into a full
time place of employment. The company became an entity with its own
purpose, its own office space, and its own gravitational pull. It also
had an insatiable appetite for cash, because as any MBA will tell you,
the lifeblood of business is green.

This period of growth and rampant consumption was
constrained only by the limited diet afforded by the generosity and
honesty of others. Basically, money was tight. Perhaps it was the
success of Captain Hector in encouraging players to register Escape
Velocity that planted the seed, but it was apparent that either pizza
and beer had become a lot more expensive or that people weren't quite as
honest as we'd been led to believe.

Locking The
Front Door

Shortly after I joined the Ambrosia team, Andrew
forwarded me an article that illustrated the benefits of crippling software. In short, the
author of a shareware program found that people were 5 times more likely
to register and unlock a crippled version of his software than they were
to register software that came fully functional from the outset. It was
the final straw in our camel-breaking, decision-making process. We would
still make shareware, but we would no longer stand there waiting for
handouts on the street -- we'd charge admission.

Well, let me tell you, we heard about it. Many who
had praised us for our idealism were now calling us sellouts. It didn't
matter that little changed for our paying customers -- they still got
their codes quickly, and had unlimited access to the game -- it was the
principle of the thing. Well, okay, it was a little inconvenient if
you'd lost your code or wanted to install it on your new PowerMac 7500,
but we were staffed by people who could resolve that with just a phone
call or an email.

I mean, we like being cool and fair, but even a
cult-following can get tiresome (cultists don't shower, they track in
mud, and they leave you to pick up the check). Besides, the mantra kept
repeating in our heads: 5 times as many registrations, 5 times, 5
times. I don't think it ever was quite that good for us, but there
was definitely an increase in sales that helped us weather some tough
times. (No, we never actually ran out of pizza, but there were times
when we had to mop up spilled beer with borrowed rolls of toilet paper.)
It was a hard decision, but it was a business decision and it turned out
to be the right one.

Time passed. Our staff continued to grow and evolve,
and my wife and I begat our son Luke. Now, let me tell you, nothing brings home how
untenable your professional and financial situation is like having a
family. When it was just my wife and I, we could fool ourselves into
thinking that we were just coed roommates living on a college budget --
but no more. Pizza and beer had given way to diapers and life
insurance.

Diapers and
Life Insurance

So, I'm working for this shareware company, and I
want to make sure that my job is secure. You have to understand that
even a 10% variance in our registrations means that someone may need to
start checking the classifieds. At the same time, it's becoming more
evident that people aren't just not paying for our software -- they are
actually going out of their way to share license codes with others over
the Internet. Some ingenious folks have even reverse engineered our
software and figured out how to generate their own license codes.

Now, we don't live with our heads in the sand. We
knew what was happening. The Internet was the great facilitator of
homework assignments and world peace, but it had also become a way for
people to get codes for any software they wanted. We felt action was
required, but we remembered the trauma of our last change in policy when
we required people to register the software instead of just asking
nicely.

So over the course of many lunches (many of which
didn't include pizza or beer, but did involve some yummy sandwiches from
Arby's), we discussed various ways for improving the whole registration
system from our standpoint without making the process onerous for our
loyal customers. Simplicity was the keyword. The final piece of the
technical puzzle fell into place one weekend as I drove through Canada,
when I recalled a bit of algebra that would make our license code
algorithm quite secure without violating any treaties or munitions
bans.

When I finally contacted Andrew, I said to him one
word: "Polynomials".

The blank look on his face continued for a long time
as I explained how we could factor the serial numbers, secure our
products, and even distribute codes that would expire and stop working
when exposed to prolonged sunlight. With his grudging consent, we
sketched out and implemented the first pass at the "new Ambrosia
registration system."

The fundamental change we made was to place the date
a license code was generated into the code itself. That timestamp
is then used at just one point in the process: it forces the user to
activate the product within 30 days, or the code expires and won't
activate anything, Now, and this is important, the timestamp has
absolutely no effect on the operation of the software after the code has
been entered. Once personalized for the user's computer, it remains
fully functional forever (unless someone wipes the system clean).

Snapz Pro
X

We first shipped the new features in the latest
version of our flagship utility, Snapz
Pro X starting in June 2001. Over the course of the summer, the
system silently and steadfastly worked as intended. Most people didn't
care that the license codes were now 12 digits instead of 8, and
registrations continued apace. It wasn't until September that we
received any negative feedback.

You see, Apple had upgraded the operating system and
most people were paranoid enough to perform a clean install. This meant
that the data file containing the software registration was lost as
well, and most of them needed to reenter their license codes. It also
meant that anyone whose serial number was generated before August needed
to contact us (by phone or email) to get an updated code. Of course,
these people had paid already, so we renewed their codes quickly and
free of charge.

Now it's been our experience that people are often
too busy or forgetful to store their license codes in a safe place, so
it's inevitable that every major system release is followed by a barrage
of requests for missing codes.

To handle the tremendous load of people who had
misplaced their codes, as well as those who saved them only to find they
had expired, we created a email address dedicated to
generating new codes. When the user entered the code, he was prompted to
send us an email (it required only a click), and someone would respond
to the request as soon as possible. Yet we were constrained by the laws
of time, space, and the New York State Department of Labor, so our staff
was only available to answer requests during regular business hours.

We decided to remedy this problem, after several
customer complaints, by automating the process of renewing an expired
code. When an expired code is entered for Snapz Pro X, the user is
encouraged to request a new license code from our automated server --
right then and there! Renewing the code code only takes 2 extra clicks,
maybe an extra 30 seconds overall, but it puts the power back in the
hands of the user. He can decide when to update his system, install
software, and renew his license code at his leisure. Even at midnight
just before a 4 day weekend.

So you are probably curious about the benefits of
expiring codes -- I mean, why would anyone even want this hassle? Let's
look at the 3 categories. For our paying customers with an Internet
connection, the extra work is minimal: an email sent to Ambrosia that's
answered within 1 business day. For those organized enough to save their
original codes codes, there isn't even a wait: they get the code on the
spot. The only inconvenience comes to those people trying to enter a
pirated code.

Which brings us back to the question, "how many
people are using pirated codes?" Well, the plain fact is that most
people are honest unless given a chance to be dishonest. If they stumble
across a working license code for software, or maybe do a quick Internet
search, then they can quickly enter the code and cover their
self-loathing with the adrenaline rush of blasting aliens and squishing
fish. It's only the most hardcore computer user who will try to reverse
engineer the software and crack the copy protection -- and I'll be
honest, there's isn't much a programmer can do to stop them. Crackers
enjoy the challenge itself, the tougher the better, so that if they want
it badly enough, they'll find a way.

While historically it's been difficult to measure
piracy, our experience is that the vast majority of computer users don't
have the time or inclination to modify the software to bypass any
license checks. Here's the rub: these users might actually buy the
software if it weren't so easy to find pirated codes. Thus, expiring
codes are a good way to defeat (or at least hamper) this kind of
casual piracy -- the serial numbers stored in databases and
posted to the Internet are only viable for a short while before they
must be renewed.

Ironically, it's these casual pirates that are
helping me measure the impact of piracy on our sales.

You see, in order to renew their stolen codes they
must contact a computer in our office. Of course, there's nothing
nefarious about it -- they send us the user name and expired code and
get back a new license code, or a suitable error message. We don't
encrypt the data, we don't grab any personal information, and we don't
even open a connection without the user's explicit permission. But when
he clicks that bright shiny "Renew" button, our server records
the product, user name, and the Internet address he came from.

And for the last 2 days, starting right after we
posted the latest update to Snapz Pro X, our server has been very busy.
Out of the 194 different hosts that tried to renew a license code, 107
of them sent in pirated codes. Incredibly, more than 50% of the people
installing the update are entering one or both of the pirated codes
we've known about for months. Some of these people even tried several
different variants on the names when the server refused them access
("maybe I misspelled it"), and one guy got so frustrated he
pounded the Renew button over and over every 4 seconds ("WHY
click IS click THIS click NOT click
WORKING???") until our server blacklisted him for flooding.

(Screen shot of an actual server log file -- the entries hilited
in red are attempts to authenticate a pirated license code.)

Now, you don't have to remind us that the sample
isn't statistically valid. Nevertheless we think that it's a reasonable
approximation of the truth -- if not a little conservative. It certainly
reinforces our perception that casual piracy is both significant and
widespread.

So, maybe I didn't look these people in the eye, but
they know I'm watching them. They indicated a real interest in our
software when they thought they could use it for free, and this gives me
hope that someone may yet decide that registering is easier and more
satisfying than stealing our hard work. If not, then either they were
forced to stop using the software or they'll likely encounter me again,
somewhere down the road. And next time, I'll bring Captain Hector.

I also hope that this article explains to our
customers (and other computer users out there) the impact that piracy
has on small software firms like ours. I hope that they can appreciate
our decisions regarding the registration system, and agree that the
extra 30 seconds and 2 clicks are a minor inconvenience. If everyone
pays for the products they like and use, companies like Ambrosia can
stay in business and continue making cool products for everyone to
enjoy.

Finally, I hope that these changes give me a little
more job security, so that I can continue doing what I love to do with
some of the coolest folks I have ever met. Because I plan on working
here as long as I possibly can, making great software, and saving enough
money so that my kids can eventually go to college. And enjoy their
share of beer and pizza.